Royalty $ per acre

I know it varies greatly, but Anyone already receiving checks have any insight on per acre per % royalty #s? Leased with 20 %.



Thanks!

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Permalink Reply by John on August 7, 2014 at 3:15am

how long is that average for? Just received first check in fox township and less than $100 an acre.

Permalink Reply by gary campbell on August 7, 2014 at 3:03pm
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Permalink Reply by adam sorell on August 8, 2014 at 2:11pm

hey everyone a  lady at work is divorced and she got her 1/2 of the royalty check but she thinks she is getting ripped by her ex or Chesapeake. So i told her to give me a copy of the check. She said she has almost 5 acres in the unit. Anyway I will attach the statement maybe one of you professionals here can decipher it. I don't know the royalty%. It's the HICKMAN well. I think she said it was in Dallas,WV

Permalink Reply by John on August 8, 2014 at 2:21pm
Adam- thanks for posting. Very difficult if not impossible to tell if they are getting screwed in any way. I've got a question about this stub. Does each line represent a different days worth of production? In other words, there are 11 lines, so does that mean it produced for 11 days?
Permalink Reply by adam sorell on August 8, 2014 at 2:56pm

John i don't know but this explains it all. I think she said that $26 was her half for the month.She thinks her hubbys getting more than one check. I think she said there were 4 wells off that pad. But i'm not sure.

According to this link it was for the month of April.

this explains it all

http://www.chk.com/owners/pages/checkstub.aspx

Permalink Reply by adam sorell on August 12, 2014 at 4:54am

John . I think your right back in 2012 looks like it produced around 100 barrels a day. The well must be shut down or something  I can't imagine why. ?????

here is 2012 output i'm guessing

http://www.wvgs.wvnet.edu/oginfo/pipeline/pipeline2.asp

Permalink Reply by Tony Yurina on August 8, 2014 at 2:56pm

Fairly easy to decipher by looking at the top of the stub.  I will take a stab at line 1.

Period date, Product Code, Price, volume, tax, deduct, net value, decimal interest, Royalty vol. 

10-2013,        1, oil,            $89.75, 63.4 bbls, $275, $0, $5,254,              , .00145,           $8.03

there is 40 cents of tax, 0 deductions, net to royalty owner $7.63 for line one. 

It is hard to read the tiny print, but I don't see any abuse.   Look at the product code at the bottom associated with each line oil, gas or NGL product for each period.  It appears after the landowner/royalty decimal interest the value is the royalty amount with tax only deducted for line 1, oil.  There are deduct codes listed, but I can't decipher them, there is small deduction for CP, GA, PC, TX from what I can barely see or read.

This don't appear to be Marcellus or Utica gas, as the Btu in the far right column reads 933 Btu per CF.

But, who can say the raw field metered and reported volumes are accurate which are inputted to this application that generates the production/royalty statement.

Permalink Reply by adam sorell on August 8, 2014 at 3:04pm

HA. All i know $26 for 5 acres kind of sucks. It has to be Marcellus  I would think.

Permalink Reply by INVICTUS on August 8, 2014 at 3:10pm

That Last sentence is critical, Tony. How do we audit the sales point, the on-site metering?

And, are the numbers the same that are reported to the state DNR?

Super critical. The audit begins here. ON THE PAD.

Permalink Reply by Tony Yurina on August 8, 2014 at 3:15pm

A wise man would have lease language permitting fiscal metering audit rights and book keeping or accounting audit rights. 

If this is Marcellus gas, I would seriously question the 933 Btu number, way low IMO and experience. Even after processing and certainly not at the well head unless there is a lot of CO2 or N2 mixed in with the natural gas.  Pure methane is 1,012.3 Btu per CF.  If this were Marcellus gas, there should be a higher BTU reading I would think.

Permalink Reply by adam sorell on August 12, 2014 at 4:03am

Why are there deductions on that stub from the owners side but none on the lessors side???.  Lots of taxes too.????

Permalink Reply by Tony Yurina on August 12, 2014 at 3:35pm

Because the production company is holding the severance tax, etc. for the royalty owner and paying to the state or gov. entity on the royalty owners behalf.  It is an accounting principle to show all monies paid and also held.

The company will also have to pay their due taxes assuming they will play by the rules according to the various statutes and tax codes.

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